EXHIBIT 99.1
IRREVOCABLE CONVERSION NOTICE AND AGREEMENT
To: Pioneer Drilling Company ("Pioneer")
0000 Xxxxxxxx, Xxxxxxxx X
Xxx Xxxxxxx, Xxxxx 00000
The undersigned registered holder of an original aggregate principal
amount of $27,000,000 of Pioneer's 6.75% Convertible Subordinated Debentures
due July 3, 2007, (the "Debentures"), hereby exercises its option to convert
the Debentures into 6,264,501 shares of common stock of Pioneer in accordance
with the terms of the Debenture Agreement by and between WEDGE Energy Services,
L.L.C. ("WEDGE") and Pioneer dated as of July 3, 2002, as amended (the
"Debenture Agreement"), effective immediately prior to the closing of the
Offering (defined below) and subject to the provisions of the last two
paragraphs hereof, and directs that the shares issuable and deliverable upon
such conversion, together with any check for cash deliverable upon such
conversion, be issued and delivered to WEDGE at the following address:
WEDGE Energy Services, L.L.C.
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
This notice shall be deemed to be an irrevocable exercise of the
option to convert the Debentures immediately prior to the closing of the
Offering (the "Effective Time"); provided that, this notice shall become
revocable upon written notice to Pioneer if the closing of the Offering has not
occurred prior to December 31, 2004. WEDGE covenants and agrees to deliver the
Debentures to Pioneer within 5 days of the date of this notice. Pioneer
covenants and agrees that after such time as Pioneer has received the
Debentures and until the earlier of (i) the Effective Time or (ii) such time as
WEDGE is entitled to revoke and does revoke this notice pursuant to the first
sentence of this paragraph, Pioneer shall hold the Debentures in escrow, after
which, in the case of a revocation, Pioneer shall return the Debentures to
WEDGE upon XXXXX's written request. Unless notice has been earlier revoked
pursuant to the first sentence of this paragraph, at the Effective Time, the
Debentures will be converted into 6,264,501 shares of Pioneer common stock.
For purposes of this notice, the term "Offering" shall mean the
offering which is contemplated to be made by Pioneer and certain selling
shareholders, including WEDGE, pursuant to a registration statement on Form S-1
with the U.S. Securities and Exchange Commission to be initially filed in the
quarter ending September 30, 2004 and pursuant to which Pioneer is proposing to
offer up to 4,600,000 shares of its common stock in a public offering and
certain selling shareholders, including WEDGE, are also proposing to offer up
to 5,269,320 shares of Pioneer's common stock which they hold. This notice
shall not affect Pioneer's right to redeem the Debentures in accordance with
the terms of the Debenture Agreement and the parties hereto agree that,
notwithstanding any provision in the Debenture Agreement to the contrary
regarding the effective date of the conversion, this notice shall constitute a
valid exercise of XXXXX's conversion rights under the Debenture Agreement
effective as of the Effective Time.
July __, 2004
WEDGE Energy Services, L.L.C.
By:
Title:
Accepted and Agreed to July __, 2004:
---------------------------------------------
Wm. Xxxxx Xxxxx
President and Chief Executive Officer Pioneer
Drilling Company
